Actual authority – A person Y has actual authority to enter into contracts with a third party on behalf of an organisation X if Y is given this authority by X’s rules or constitution, or a resolution passed by X, or a contract between X and person Y.
Apparent authority – A person Y has apparent authority to enter into contracts with a third party on behalf of an organisation X if X represents to the third party that Y is authorised to enter into contracts on X’s behalf.
Charitable status is generally used to mean tax-exempt status as a charitable organisation.
Charitable trust board means a charitable trust or society registered and incorporated under the Charitable Trusts Act 1957.
A Committee or Board is made up of officers or trustees, and carries out specific functions including setting the overall direction for an organisation (its strategies and goals), ensuring the organisation achieves its purpose, and calling general meetings.
The common law is law based on the decisions of judges or on custom, unlike statute law, which is law passed by Parliament.
Compliance programme refers to an organisation-wide set of structures and procedures designed to make sure the organisation complies with its legal obligations.
Constitution – An organisation’s constitution is its central document. It sets out the organisation’s purpose and objects and the rules for how it will operate, including matters such as the powers and duties of its officers. Incorporated societies often use the term “constitution” to refer to their rules, and trusts often use the term to refer to their trust deed. “Constitution” is also the formal legal term used for a company’s central document.
A contract is a legally enforceable private agreement in which each side promises to provide a benefit to the other.
A crime is a breach of the law that can result in prosecution and punishment by the state, as opposed to a tort (or civil wrong) or breach of contract, which can result in a civil lawsuit brought by a private citizen or organisation and in “damages” (compensation).
Director – The directors of a company are the officers of the company who are responsible for its day-to-day management.
Duty – In a legal context, a duty is a legal obligation to do or not do something.
Duty of care means an obligation to take reasonable care not to cause injury or damage to a person or their property. The concept is particularly relevant to the tort of negligence.
Employee generally means someone who works for an employer under a “contract of service”, as opposed to an independent contractor, who works on their own account under a “contract for services”. The meaning of “employee” may differ depending on the Act that covers the relevant situation – for example, in the Health and Safety in Employment Act, “employee” also includes certain volunteers.
Employer is defined differently in different Acts. In the Employment Relations Act, an “employer” does not include people who hire independent contractors or engage volunteers. In the Health and Safety in Employment Act, “employer” does not include people who hire independent contractors, but the Act includes certain volunteers within the definition of “employee”, so that employers owe certain duties to those volunteers.
Fiduciary – If a person owes another person a “fiduciary duty”, they have a duty to act in the other’s best interests at all times. A trustee, for example, owes a fiduciary duty to the beneficiaries of the trust. (Trustees are also sometimes referred to as “fiduciaries”.)
Governance refers to the role of a management committee in defining its organisation’s purpose, mission and goals, and monitoring the organisation’s achievement of them.
Incorporated society means a society that is incorporated under the Incorporated Societies Act 1908.
Incorporation is where an organisation forms a separate legal identity from that of its members.
Indemnity – A person gives another person an indemnity (“indemnifies” them) if they agree to be responsible for any liabilities or penalties that the other person incurs. Under a Professional Indemnity policy, for example, an insurance company indemnifies the insured person for liability for negligent advice or services.
Independent contractor means someone who is in business on their own account. They are referred to as having a “contract for services”, as opposed to an employee, who has a “contract of service”.
An interest, in property for example, means a right, claim or share.
Legislation means laws made by Parliament (Acts), or made under the authority of a law made by Parliament (regulations, for example).
Liability means a legal obligation or responsibility, such as a liability to pay a debt, or liability to pay compensation for damage caused to a person or their property or reputation.
Limited liability – If a person has limited liability, this means they are not personally liable for any contract their organisation makes or any debt or other obligation it incurs. The members of an incorporated society have limited liability, as do shareholders in limited liability companies.
Liquidation is the process that brings an organisation’s activities to an end. The purpose of liquidation is to collect and distribute the organisation’s assets.
Natural justice refers to certain rules to do with decision-making that ensure that the decision is made fairly – namely, the decision-maker must act fairly, in good faith, and without bias or conflict of interest, and must give each side a chance to be heard.
Officers – The officers of an organisation are the elected representatives of a board or executive committee who usually deal with specific tasks described in the board’s constitution. Officers usually include the chairperson, treasurer, secretary and other members of the board or executive committee.
Regulations are made by Cabinet (formally by the Governor-General through an Order-in-Council) under the authority of an Act of Parliament, and have the force of law. Regulations usually deal with administrative matters or other matters of detail.
Risk management means managing your organisation and its activities so that you avoid or minimise legal and non-legal risks and liabilities.
A tort (or civil wrong) is where a person causes injury or damage (whether physical or monetary) to another person, in breach of one of the legal duties that private citizens owe each other – for example, negligence or defamation.
Trade – In the Fair Trading Act, the Consumer Guarantees Act and the Commerce Act, “to trade” means to engage in any activity relating to supplying or acquiring goods or services.
A trust is a legally recognised arrangement where property is legally owned by certain people (the trustees), but the trustees are legally required to manage the property for the purposes or beneficiaries of the trust.
A trust deed is the central document that establishes a trust, made by the “settlor” (the person who creates the trust). The trust deed usually appoints the trustees and states their powers, and names the beneficiaries of the trust.
A trustee legally owns and manages the assets of a trust, but must manage them for the benefit of the beneficiaries of the trust.
Unincorporated group means an organisation that does not have a separate legal identity from its members – unlike a company or incorporated society, for example.
Vesting of property refers to where real property (such as land and buildings) or personal property (goods and chattels) is acquired by or on behalf of a legal entity. The property at that point “vests” in the legal entity, which means that the legal entity becomes the legal owner of the property.
Volunteer is not defined in most legislation, but is generally used to mean a person who chooses to work for the good of the community or some public benefit, and who is not paid or otherwise rewarded for this work and does not expect to be. The term is not used to include people doing on-the-job training.